AT&T hates plan to help small carriers, threatens boycott of FCC auction

AT&T is hopping mad that the Federal Communications Commission wants to give smaller carriers a more favorable shot at buying broadcast TV spectrum that will be shifted to the cellular industry.

The airwaves in the 600MHz band are set to be auctioned next year, and the FCC seems to be leaning toward putting restrictions on the biggest carriers. The restrictions could limit the amount of money the auction takes in but help prevent AT&T and Verizon from further dominating the US wireless market.

AT&T pulling out of the auction could be good for its rivals, but would make the spectrum sales less lucrative for the government and TV broadcasters.

Further Reading

"AT&T could either participate in the auction, accepting that it will likely obtain only a fragmented and inefficient 600MHz footprint, or it can choose to withhold its capital for other investments and sit out of the auction entirely," AT&T VP Joan Marsh wrote to the FCC. "AT&T has never declined to participate in a major spectrum auction and certainly did not intend to do so here, where capital contributions will be needed across the wireless industry for a successful outcome. But if the restrictions as proposed are adopted, AT&T will need to seriously consider whether its capital and resources are directed toward other spectrum opportunities that will better enable AT&T to continue to support high quality LTE network deployments to serve its customers."

You can read AT&T's letter here, courtesy of FierceWireless. A FierceWireless story notes that restrictions under consideration could mean that when "auction bidding hits an as-of-yet unknown threshold in a given market, the FCC would set aside up to 30MHz of spectrum in that market. Companies that hold at least one-third of the low-band spectrum in that market then wouldn't be allowed to bid on the 30MHz of spectrum that has been set aside."

The restrictions could affect AT&T in 70 percent of the country, Marsh wrote.

"In short, in all band plans less than 70MHz, restricted bidders—specifically AT&T and Verizon (and in a small number of markets, potentially US Cellular or CSpire)—would be limited to bidding for only three blocks," she wrote. "And in each market where the restrictions attach to at least two carriers, at most only one restricted carrier could emerge from the auction with a 10x10 MHz allocation."

A 10x10 MHz allocation (10MHz for uplink and 10MHz for downlink) is the minimum needed for economic and technical reasons, AT&T said. "The auction restrictions as proposed make it a virtual certainty that, for many proposed band plans, either AT&T or Verizon or both would be limited by the auction restrictions to a fragmented, uneconomic, and inefficient 600MHz footprint," the company said.

Verizon last week urged the FCC not to give T-Mobile favorable treatment, although T-Mobile is the smallest of the four major national carriers.

"T-Mobile is an established nationwide incumbent with a large, multinational parent and a demonstrated ability to acquire the spectrum it needs," Verizon said. "For example, T-Mobile recently entered into an agreement with Verizon to acquire what it describes as a 'huge swath' of low-frequency spectrum covering 70 percent of its customers. And the last time T-Mobile chose to participate in an auction, it dominated the bidding—spending $4.2 billion and acquiring more spectrum than Verizon and AT&T combined."

Sprint has offered its own proposal for the auction, but we're still waiting for the FCC to make its intentions official. The auction is scheduled to happen in mid-2015, although getting the broadcasters on board is another challenge.

The auction will affect more than just the big four carriers. The Rural Wireless Association last week told the FCC that it opposes a proposal by Verizon "because it is a clear attempt to tip the scales further in favor of the large national carriers by making it difficult (if not impossible) for small and rural wireless carriers to participate in the 600MHz spectrum auction."

"T-Mobile is an established nationwide incumbent with a large, multinational parent and a demonstrated ability to acquire the spectrum it needs," Verizon said. "For example, T-Mobile recently entered into an agreement with Verizon to acquire what it describes as a 'huge swath' of low-frequency spectrum covering 70 percent of its customers. And the last time T-Mobile chose to participate in an auction, it dominated the bidding—spending $4.2 billion and acquiring more spectrum than Verizon and AT&T combined."

"You can't let T-Mobile get any more spectrum because they already have enough - we know because we sold it to them!"

When will it end. A beneficent, loving, customer-focused company like ATT, at the mercy of brutal government regulators. I heard they were considering making it a not-for-profit company and lowering all their prices by 40%. And now, they and their fellow sufferers at Verizon are being forced to compete with the ruthless cutthroats at Sprint and T-Mobile. Won't anyone think of the children?

Sit the auction out, let the little guys buy up spectrum. Increase your backhaul rates even more, drive the little guys out and buy them up for less than the spectrum plus towers would have cost in the first place.

When will it end. A beneficent, loving, customer-focused company like ATT, at the mercy of brutal government regulators. I heard they were considering making it a not-for-profit company and lowering all their prices by 40%. And now, they and their fellow sufferers at Verizon are being forced to compete with the ruthless cutthroats at Sprint and T-Mobile. Won't anyone think of the children?

As pleasing as it is to see AT&T unhappy this auction remains a shameful give away of vital public resources. Spectrum should never be sold, only leased for limited times with strict governance over how it is used.

In the end this whole auction system is a farce. The government follows the money. If the FCC wants to support smaller carriers they should just forbid the largest carriers from entering the auction at all. Instead they play games with the rules.

The FCC has the most heartless lawyers in government. I count a few of them as my friends. They routinely find ways to make sure absolutely nobody is happy with the results of spectrum sales, which is of course the ideal outcome because it keeps them coming back again and again.

Also they go for the eyes if a company tries to improperly allocate, depreciate, or misuse their spectrum which is good. Unfortunately there are a lot of fuddy duddies in Congress who don't necessarily believe the FCC's highly competent legal hit squad should be allowed to run amok regulating. I would count AT&T's letter as the opening attack in what will be some fierce and furious lobbying in the run-up and fallout of this auction.

ATT has a right to be mad, after all that political money supporting all those politicians and they might not get to the FCC? They'd better check in on Robert's Supreme Food Court, where you can buy a Justice flapjack for just 1 million dollars. This is heresy, the most wealthy, most hated corporation can't monopolize the wireless market by sucking up all of the public's spectrum? Better pull on that Congressional and Supreme Court lease. Let's see how they try to make the FCC heel.

Good on the FCC, perhaps there's hope yet for the American people. Now if that spectrum were in the hands of Internet Services providers - WISPs, *that* would seal the deal. FCC would go down in history as removing the barriers to innovation, free enterprise, open competition and rapid development.

We need to break up these integrated monopolies - end to end data, content, billing, customer service, security, that's *not* the Internet. The Internet is a *network of networks* where interconnection companies exist, last mile networks exist.

If we don't have that, we've thrown away 1/2 of why the Internet is any good. Our Internet before ATT/Verizon/Comcast, *was* military grade, because it could survive the loss of parts of the net.

An end to end monopoly, like AT&T, Verizon, Comcast, breaks the routing rules, breaks the resiliency rules, and just *is not* the Internet. Its *their* net, and when they fuck it up, their net fails and we get *nothing*.

Demand the real Internet protocols be adhered to so failover routing works. So cellphones have multiple carriers so if one tower fails, you can still use it.

That my friends is why the Internet is great. Today's ATT/Verizon/Comcast net is nothing more than a billing machine that traps users into a narrow, inescapable, connection they control.

Let the spectrum auction go forward with the notion that we get our Internet back, with all its built-in goodness, fairness, level playing field, built-in competition, built-in routing to the best network path, built-in best performance. Free the Internet now!

There could come a day when I might be a customer again. That day is when there is no other means of communication not through ATT. Even then I might choose two tin cans and some string. So really, no need for more spectrum, I won't be using any of it you own. Purchasing spectrum on my behalf would be completely wasted money. Just looking out for your best interests you know.

Why is it that bands of the spectrum need to be sold to a single carrier at all? Perhaps the FCC should move to a dynamic spectrum sharing model whereby the entire spectrum is shared by all carriers and carriers are billed based on their utilization of that spectrum. Google already has a database to facilitate sharing of the white space spectrum.https://www.google.com/get/spectrumdatabase/

This would lead to better utilization of spectrum and prevent carriers from hoarding spectrum which is sometimes totally unused by the carrier.

Sounds like some carriers need to be taught a little respect and humility. Time to send them to boarding/military school and tell them the rules they'll have to live by. Some regulations that get them to appreciate what they have (although after the regulations are put in place the tense of the sentence will have to be changed to "had"). No one likes a spoiled brat.

This is what always burns me when I read about AT&T's latest douchebaggery. I used to really respect the company in the past, but I think the turning point was when Ed Whitacre took the reigns. He set the tone for the 'executives first, all others be damned' attitude that prevails to this day, essentially cashing in on a century's worth of reputation to pad his own personal fortune.

He and Stephenson are such greedy little shits and they have gutted everything that AT&T used to stand for.